Residential transactions rise 13pc in first quarter

Residential property transactions in Bahrain have increased by 13 per cent in Q1-2023, following legislative changes that have made it easier for foreigners to buy property in the country.

In its latest Bahrain Real Estate Market Review, Knight Frank also details how the industrial warehousing sector continues to grow, while retail rents remain under pressure.

Faisal Durrani, partner and head of Middle East research at Knight Frank, said: “Bahrain’s residential market has benefited from legislative changes, such as foreign ownership law, strata law, the creation of freehold zones and the recent introduction of the Golden Residency visa scheme. This has helped to drive up deal activity in the market, which climbed to BD1.08 billion in 2022, compared with BD1.04bn last year.”

Mr Durrani added that apartment prices have retreated by 3.5pc in the last 12 months, while villa prices have risen by a marginal 1.5pc over the same period.

This suggests that an affordability ceiling may have been reached, with demand shifting to more affordable projects that are financed by the Mazaya social housing programme.

When it comes to the office market, the Knight Frank report finds that office rents have slipped by 2.1pc in the last 12-months, but there are reasons for landlords to be optimistic.

According to Stephen Flanagan, partner and Mena head of valuation and advisory at the firm, there has been an influx of international companies looking to set up operations in Bahrain, driving up demand for office space.

This was due to several initiatives implemented by the government to attract foreign investment, including the establishment of free zones, tax incentives and streamlined business regulations, he explained.

On the retail front, leading establishments have successfully evolved in response to new consumer trends.

By expertly blending traditional retail offerings with food and beverage, entertainment and leisure experiences, these entities have managed to maintain high occupancy and lease rates.

This achievement comes despite an overall 2.6pc annual decrease in average retail lease rates.

Echoing trends across other GCC countries, Bahrain’s logistics sector has remained the star of the real estate market. Robust demand and high gross yields make this sector particularly attractive. Gross warehouse yields stand at 9pc, which compares with 5pc for single let villas, 6.5pc for single let apartments and 7.5pc for offices.

“Like elsewhere in the world, the demand for high-quality, internationally specified warehousing is on the rise. The global boom in online retailing has driven up requirements for last-mile logistics facilities, storage warehouses and dark-kitchens; a trend that is set to continue underpinning the strong rental growth recorded by the market,” Mr Durrani concluded.

Overall, the Bahraini property market is showing signs of recovery, with strong demand for residential properties and continued growth in the industrial warehousing sector. However, retail rents remain under pressure.




Share this page Share on FacebookShare on TwitterShare on Linkedin

Read our latest publication

'Bahrain-France Investor Guide' -
is YOUR guide to invest in Bahrain and in France. Click here to view the online guide